Mortgage Crisis to Cost Nashville Economy $1 Billion
The Nashville metropolitan economy will lose about $1 billion next year because of the mortgage crisis, according to a national report released Tuesday.
The report, prepared for the U.S. Conference of Mayors, found that the economic slowdown caused by mortgage defaults and real estate foreclosures will cut the expected growth of the area’s Gross Metropolitan Product by 0.7 percentage point, to 2.5 percent. The Gross Metropolitan Product is the measure of the total value of the goods and services produced in a community.
The Nashville-Davidson County-Murfreesboro metropolitan area had a gross metropolitan product of $60.3 billion in 2005, ranking it 40th in the country, according to another report released by the mayors group in January.
Rising home prices had fueled consumer spending, which drove economic growth, the mortgage crisis report states. Now, the reverse is happening. The report predicts economic growth of less than 2 percent next year in 128 of the 361 metropolitan areas that were studied.
Other Tennessee metropolitan areas and their projected declines include:
Jackson, 0.7 percentage point, $77.2 million
Clarksville, 0.8 percentage point, $13.7 million
Knoxville, 0.6 percentage point, $311.9 million
Chattanooga, 0.5 percentage point, $166.3 million
Memphis, 0.6 percentage point, $482 million
Mortgage crisis to cost Nashville economy nearly $1 billion, report says
By BILL THEOBALD